When you listen to the news they talk about the state of the economy. But, there’s a problem with that. There are really two economies at play in today’s market. There is the traditional economy and the creative economy. That’s what Steve Denning told me last week and I agree with him.
The traditional economy is characterized by a desire for consistency and stability. The focus is on making money. This is done by providing a standard experience or service that can be relied upon over and over again to be the same as it was before. You do this by getting really efficient at marketing, production, and delivery. Communication inside is top-down. Managers are told what to do and they tell workers what to do. The cheaper you can make more money, the better.
The creative economy is characterized by new, exciting offerings, greater customization, and addressing emerging demands with just-in-time solutions. The focus is on delighting customers profitably. This is done by getting really good at communicating with customers, engaging them on an ongoing basis, and building relationships that regularly unearth new and better ways of providing value. Communication inside creative organizations happens via two-way conversations at all levels. Everyone is involved in the quest to discover how to create better offerings.
The happier your customers are, the better.
“It’s a great time to be an entrepreneur,” said Denning at my recent CEOnly lunch, “but it’s a scary time to be an organization. Entrepreneurs can come up with new ideas that scale almost instantly and have a global presence. When they succeed they can make a lot of money very fast. Organizations have to retool. It’s the money that is driving the creative economy. There is so much money being made by new services that are lighter, more exciting, more personalized, easier to use… this money is driving the creative economy inexorably forward. The massive capital it is generating is making the creative economy an unstoppable force. If organizations that operate in traditional ways don’t figure this out, they will be crushed by the rise of new ventures.”
So, it’s not about making money, but a ton of money is being made. That’s an important distinction. The money that is being made will drive the new economy forward, leaving the traditional economy in its wake. But, don’t take your eye off the ball, which is delighting customers profitably. That’s where the action is.
delight in owning anything unshared.
– Lucius Annaeus Seneca